(NAR) VOL. 29 NO. 3/ JULY - SEPTEMBER 18
1.1 This CL shall cover the rules and treatment of investments in associates and/or subsidiaries which are regulated by the BSP and their corresponding risk charges under the RBC2 Framework.Section 2. Definition
2.1 Associates - An associate is an entity over which the investor has significant influence and that is neither a subsidiary nor an interest in joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies (IC CL 2016- 65 on the: Financial Reporting Framework).2.2 Subsidiaries - A subsidiary is an entity that is controlled by another entity (known as parent). The parent controls a subsidiary when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee (IC CL 2016-65 on the: Financial Reporting Framework)
3.1 If the investment in Associate or Subsidiary is being regulated by the Bangko Sentral ng Pilipinas (BSP), the following risk charges will be applied:
Classification
Year 1
2017
2018
2019
Un i versal Banks
3 . 00%
3 . 50%
4 . 00%
Commerc i al Banks
4 . 00%
4 . 50%
6 . 00%
Rura l and Thrift Banks
7 . 50%
9 . 00%
12 . 00%
Sav i ngs and Loans Associations
13 . 00%
14 . 00%
15 . 00%
O t hers
22 . 50%
24 . 00%
25 . 00%
3.2 Investment in Associates and Subsidiary which is not under the regulation of the BSP shall be subjected to the existing rates of as follows:
Yea r | R i sk Charge |
2017 | 50% |
2018 | 55% |
201 9 onwards | 60% |
4.1 This CL shall take effect on the annual submission for 2017 and subsequent quarterly submissions covering the calendar year of 2018 onwards.
4.2 This CL shall be effective immediately. For strict compliance.